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The real story behind the $167 million verdict

Making national headlines today is the news of a physician’s assistant who obtained an astronomical $167 million jury verdict against her employer in a Sacramento federal court. Going largely unreported, however, is information about the case (Ani Chopourian v. Catholic Healthcare West) that should be noted by employers in the healthcare industry.

While media outlets accurately have depicted the case as a sexual-harassment lawsuit, the plaintiff also alleged violations of section 1278.5 of California’s Health and Safety Code. The legislature enacted the strong medicine in that anti-retaliation statute to “encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions.”

The colossal award in the Sacramento case most likely was spurred by the jury’s belief that the employer violated this healthcare law. Indeed, while many jurors could be offended by an employer who does not take steps to prevent or stop sexual harassment against healthy employees, such jurors assuredly would be outraged by the idea that an employer punished a healthcare worker for reporting flaws in the delivery of medical care to sick and suffering patients. Either way, employers in the healthcare field should be aware that this law has a lot more teeth – some might say, “more fangs” – than other employment laws.

The statute protects patients and healthcare workers (including members of the medical staff) who present “a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity.” The law also protects such persons who have “initiated, participated, or cooperated in an investigation or administrative proceeding related to, the quality of care, services, or conditions at the facility that is carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or governmental entity.” Such complaints or participation/cooperation presumably would concern perceived violations of the myriad of regulations that pertain to the healthcare industry.

In forbidding such reprisals, section 1278.5 creates very stern presumptions against healthcare employers. For example, it imposes a “rebuttable presumption” that the employer unlawfully retaliated “against an employee . . . if responsible staff at the facility” knew that the employee filed a grievance or complaint about healthcare flaws and the employer then executed an adverse employment action against the employee “within 120 days of the filing of the grievance or complaint.”

The law also contains a clause that could diminish the protections of the peer-review privilege. In other types of employment cases, this privilege oftentimes may shield an employer’s evaluations of and deliberations about a healthcare professional’s skills and abilities and the reasons for the adverse action.

Finally, as demonstrated by the jury verdict in the Sacramento case, the law provides very generous remedies to prevailing plaintiffs while dosing unsuccessful defendants with severe punishment. For instance, any individual “who willfully violates this section is guilty of a misdemeanor punishable by a fine of not more than twenty thousand dollars ($20,000).” Moreover, a prevailing employee could be “entitled to reinstatement, reimbursement for lost wages and work benefits . . ., and the legal costs associated with pursuing the case,” as well as “any remedy deemed warranted by the court.”

Given the plaintiff’s success in this case and the notoriety of her verdict, healthcare employers in California should brace themselves for many more similar suits to follow. The cost of trying such actions and the size of the jury’s award underscore the need for healthcare employers to consult with employment attorneys who are knowledgeable about the industry (and the many laws and regulations pertaining to it) when making important personnel decisions.

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